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Why Stamps.com Stock Lost 16% in November

By Demitri Kalogeropoulos - Dec 8, 2020 at 9:52AM

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Investor worries turned to a potential slowdown once the coronavirus pandemic ends.

What happened

Stamps.com ( STMP ) shareholders lost ground to a surging market in November. The stock fell 16% compared to the 11% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

The loss didn't put much of dent in wider gains, though, and shares remain higher by over 100% so far in 2020.

A delivery man drops off boxes at a home.

Image source: Getty Images.

So what

Investors have been more attracted to Stamps.com's business due to COVID-19's positive impact on e-commerce demand. That lift was clear in the earnings report the company issued in early November, which paired soaring sales growth with spiking profitability.

However, investors quickly turned their attention to worries around an approaching slowdown now that vaccines are starting to be distributed. The end of the pandemic's threat will no doubt erase some of the recent market share gains that Stamps.com has enjoyed.

Now what

There's no evidence of that coming slowdown, yet. In fact, CEO Ken McBride and his team last month raised their full-year outlook on both the top and bottom lines. That's why investors who liked the growth stock before November's earnings report should consider holding on through the latest share price volatility.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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